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Vocabulary
You be the judge
Adv. and disadv. of S.P. and partnerships
Types of Partners
Dissolving a Partnership
100
a business owned and operated by one person
What is Sole Proprietorship?
100
Nancy Myers's law office is in the prestigious Brown & Brown Law Office Building. To help her business, Myers has business cards printed that read, "Nancy Myers of the Brown & Brown Law Office." When Samuel Brown, one of the Brown partners, discovers what Nancy has done, he laughs and tells her she is very clever. Relying on the information on the business card, Bob Wash loans Myers $5,000. When Myers does not pay the money back, Wash sues both Myers and the Brown partnership. Who will be liable to Wash for the money Myers borrowed. Explain your answer.
they both would be sued under partnership by estoppel. Myers led Wash to believe she is part of the Brown & Brown office, and Samuel Brown knew about the deception. So they are both liable to pay off the sue.
100
3 of the 5 advantages of sole proprietorship.
What is ease of creation, total control, retention of profits, freedom from excessive governmental control, or one-time taxation of profits?
100
Active participation in the business, known to the public, and unlimited liability.
What is a general partner?
100
This happens when one of the partner dies.
What is dissolution?
200
the partnership agreement
What is Articles of Partnership?
200
Ruth Drummond, a general partner,purchases all merchandise for the partnership. A manugacturer gives Drummond a 10% discount on goods she purchases for the partnership. Drummond never tells the other partners about the discount and keeps the difference for herself. When the other partners learn of the discount, they demand that Drummond turn over the money she pocketed. Are the partners correct in their demand. explain your answer.
yes. They must account to the firm for all profits they make at the firm's expense, and must be trustworthy with others.
200
The 4 disadvantages of a Sole Proprietorship.
What is limited capital, unlimited liability, limited human resources, limited lifetime?
200
Active participation in the business, unknown to the public,unlimited liability.
What is a secret partner?
200
Another way of a partnership being dissolved is ___ ___.
What is a court degree?
300
when 2 or more parties combine there skills to run a business
What is General Agreement?
300
Max Massie is a general partner in the construction firm of Massie, Briggs, and Yates. While operating a forklift at a construction site, Massie collides with a limousine owned by the mayor. The mayor sues all three partners. Yates and Briggs argue that because Massie was at fault, the mayor has no cause of action against them. Are they correct. explain your answer.
no. The whole firm is held liable for a tort committed by one of the partners even if it was just the one partner.
300
3 advantages of partnerships.
What is more capital and credit, burden of work is split amongst others, and the a partner does not have sole responsibility for any losses suffered?
300
Not active participation in the business, known to the public, unlimited liability
What is a silent partner?
300
A cause for dissolution to not necessarily bring the business to an end.
What is other partners may want to continue in business together?
400
all the partners must be sued together
What is Joint Liability?
400
Alan Gallagher and Norma Kendall each contribute $20,000 to begin their partnership. At one point, the venture is in trouble, so Gallagher lends the partnership an additional $10,000. Eventually, the partnership is dissolved. After the creditors are paid, $50,000 of assets remain. Kendall claims that each of them should receive $25,000. is Kendall correct. Why or why not.
no. On dissolution, after creditors are paid, all partners who made loans to the firm are entitled to the return of the amount of those loans.
400
The one disadvantage of a partnership.
What is when each partner in the partnership shares in all liabilities?
400
Not active participation in the business, unknown to the public, unlimited liability.
What is a domant partner?
400
This type of dissolution is a change in the relationship of the partners that occurs when any partner stops being associated with the business.
What is dissolution of a partnership.
500
not a real partnership
What is Partnership by Estoppel?
500
Your Aunt Matilda, a sole proprietor, owns a store celled Scrapbook Heaven. She has decided to hire you and your friend Ted to work in the store on the weekends. Aunt Matilda is convinced that hiring you and Ted will not involve any new entanglement with the government. Is this true. why or why not.
no. Aunt Matilda must get a hold of the International Revenue Service to get employer identification cards for both you and Ted.
500
differences of the advantages between sole proprietorship and partnership.
What is the advantages of a partnership has less stress from work, more capital and credit is available to a partnership. While S.P. is easy to create has total control over the business, the retention of profits, freedom from excessive governmental control, and one-time taxation of profits?
500
not active in the business, known to the public, limited liability.
What is a limited partner?
500
Finish the sentence: Dissolution occurs at the moment when......
What is one partner ceases to be associated with the firm?